After surging more than 15 percent to over $2 per million British thermal units (MMBtu) on Wednesday, U.S. front-month natural gas futures rose by another 5 percent by mid-day on Thursday, after the EIA reported a smaller-than-expected natural gas injection into storage.

As of 12:30 p.m. EDT on Thursday, the front-month Henry Hub futures price was $2.239/MMBtu, up by 5.27 percent on the day.  

Earlier on Thursday, the EIA issued its weekly natural gas storage report, showing a net increase of 66 billion cubic feet (Bcf) from the previous week in U.S. working gas in storage as of September 18. At 3.680 trillion cubic feet, working gas in storage is above the five-year historical range, but last week’s net increase in storage was lower than the 78-bcf build that a Reuters poll of analysts had expected.  

This week, natural gas prices have seen some extreme volatility, from a 10-percent plunge on Monday, to a 15-percent surge on Wednesday, also due to the rollover of the October futures contract expiring on September 28, with traders rolling out of the October contract to the November contract of higher prices.

Lower natural gas production and expectations of increased exports via pipeline to Mexico and tankers of liquefied natural gas (LNG) also supported natural gas prices on Wednesday and Thursday.

In addition, the LNG gas feed is also set to rise to 5.7 bcfd on Thursday from 3.9 bcfd on Tuesday, which was a two-week low due to Tropical Storm Beta earlier this week.

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Expectations of cooler weather in some parts of the U.S. next week also lent support to natural gas futures on Thursday.

“A major pattern change will occur mid-next week as a strong early season cool shot pushes into the Midwest and Northeast with highs of 40s to 60s,” according to NatGasWeather.com.

By Tsvetana Paraskova for Oilprice.com

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